Business and professional services firms are negative about the outlook for business expansion over the next year, new data revealed on Thursday.
The Confederation of British Industry said that sentiment about the general business situation continued to diminish, but this occurred at a slower pace than in the previous quarter.
New data revealed that business volumes declined over the last quarter, following a stabilisation period in the three months to August.
The Confederation of British Industry added that volumes are expected to decline at a similar pace in the three months to February 2020.
Profitability at business and professional services firms “fell sharply” in the three months, the report said.
This is the fastest decline since November 2011, and the Confederation of British Industry said that it is expected to fall at the same pace in the following quarter.
Meanwhile, employment at business and professional services firms fell at the fastest pace since May 2017.
“The current economic climate is holding back UK services firms, which are reporting falling sentiment, declining volumes and weaker profitability,” Rain Newton-Smith, Chief Economist at the Confederation of British Industry, commented on the data.
“Neither is the outlook expected to improve, with firms pessimistic about their prospects for expansion, investment plans having been scaled back and hiring on hold,” the Chief Economist continued.
“Whoever forms the next Government, it’s essential they commit to refocusing on the domestic agenda, to propel the UK economy forward – prioritising skills and infrastructure investment, as well as reaching net zero by 2050. And securing a good Brexit deal which protects our world-beating services sector, which forms 80% of our economy.”
As parties prepare for the general election to be held later this year on the 12th December, speculation prevails over who will form the next government.
News emerged on Thursday that the Conservatives are set to win 359 seats, giving the party a majority of 68 seats, according to a new poll.
Elsewhere on Thursday, the political climate also weighed on the automobile sector, as UK car production declined for 16 out of the past 17 months.